Simon Terry - December 2018
The Interim Report of the Financial Services Royal Commission by the Hon. Kenneth Hayne AC QC has been released and it is sobering reading on the many issues of conduct in the financial services industry in Australia. As highlighted in the Executive Summary a principal cause of the incidents reviewed by the commission appears to be ‘greed – the short term pursuit of profit at the expense of basic standards of honesty’. An all out sales culture forced the individual customer’s needs and interests to a secondary consideration.
Bank First, like many others in the mutual banking sector, can rightly point to the deeper understanding of the needs of its customers as we are organisations where the owners are the customers. A mutual bank has a continuous focus of delivering value to its customers - a people before profit focus. Bank First reinforces this focus, together with its purpose and values to all its employees and stakeholders through its recent rebranding.
However, we must also recognise that the culture of an organisation is shaped by more than who benefits from its profits. The Royal Commission notes we cannot attribute all the poor customer outcomes in the industry to ‘bad apples’. The Commissioner notes “the conduct… is inextricably connected with remuneration practices, with deficiencies in governance and risk management and with the culture of the entities concerned”. Financial services organisations need to have an active focus on how their culture, rewards and systems are delivering for their customers.
Bank First is judged by how it delivers services for its customers every day. The need to focus on our culture and systems to deliver is at the forefront of consideration by the Board and management.
The culture and systems of Bank First influence how our customers experience our organisation and that is shaped by how we put our purpose and values into action every day. It is essential that the Board and management continue to assess our actions and the systems to ensure that we continue to deliver an exceptional customer service experience and always act in the best interest of our customers. We take this responsibility seriously.
We are likely to continue to hear more of the Hayne Royal Commission as it continues its investigations and works towards its conclusion in early 2019. We are also likely to see an active regulatory response to the issues raised, particularly with regard to the role and responsibilities of intermediaries, like mortgage brokers and financial advisers, and the execution of obligations on responsible lending. Bank First is committed to continue to put its customers first and seek to improve its products and services.